Silicon Insider: The Battle Between Intel and AMD

Sept. 13, 2007 — -- The greatest duel in modern business history has opened its latest front.

When you think of two tech companies standing toe to toe and exchanging punches for round after round, year after year, fight cards like Apple vs. Microsoft, HP vs. IBM, and Sony vs. Nintendo come to mind.

But to my mind, none compares with the three-decade-long, ongoing blood feud, fight to the death, cage match between Intel and Advanced Micro Devices for ownership of the high-end of the most important product on earth: the microprocessor.

This is a story that has everything: strange Oedipal relationships, lifelong feuds between tycoons, a "Bleak House"-type lawsuit that went on for more than a decade, billions of dollars at stake, government investigations into the strong-arming of customers, wild stock booms and crashes and some of the greatest examples of human ingenuity ever seen.

Someday, someone -- maybe me -- will write a book about Intel versus AMD … and it will read like the ultimate boardroom soap opera, only true.

I've described the history of this feud before, so I'll just summarize. When the legendary Fairchild Semiconductor, the ur-company of modern Silicon Valley, exploded in the late 1960s, it scattered more than 100 new companies, like seed pods, all over the region.

The thoroughbred company of this new generation was Intel Corp., founded by Fairchild's general manager, Bob Noyce, and chief scientist, Gordon Moore. Both men were already living legends, having been part of the original team that invented the integrated circuit chip, and with Intel would go on to be among the most esteemed figures of the electronics age.

Noyce and Moore brought with them another scientist, a Hungarian refugee who was Fairchild's top applications guy, Andrew Grove. Grove had been fiery, arrogant and not very popular among all the cool young dudes that populated Fairchild (no one at the company was over 30). But Grove would also prove to be the greatest businessman of his generation.

Far more popular was Jerry Sanders, Fairchild's fast-talking, flamboyant Southern California sales guy. But Sanders also had the reputation of being a little too slick for his own good.

Not surprisingly, within hours after Noyce and Moore announced that they were starting a new company, they were approached by venture capitalists eager to invest. Sanders, meanwhile, slept on a friend's couch, fought with some of his partners, and took months to finally raise the minimum funding he needed to start AMD.

But Sanders had one thing that Grove didn't have: a mentor relationship with Noyce. And so, to help out his young disciple, Noyce not only acted as an early investor in Jerry's company but gave AMD the much-coveted right to be second-source supplier to Intel's products -- that is, a backup in case demand outsurged supply. Grove was not pleased.